The Bank of England has cut interest rates from 0.75 per cent down to 0.25 per cent in an emergency move to fight the “economic shock” of the coronavirus outbreak.
It said the decision follows the spread of Covid-19, which has seen stock markets and shares plunge around the world.
Bank Governor Mark Carney said the measures announced will “prevent a temporary disruption from causing longer lasting economic harm”.
He added that the moves were made in co-ordination with the Treasury and ahead of the Chancellor’s Budget.
Further measures to support the UK amid the coronavirus uncertainty are also expected to be announced in Rishi Sunak's spending plan later today.
Ex-Cabinet minister David Gauke told talkRADIO's Julia Hartley-Brewer he was "not altogether surprised" by the move and warned that the virus outbreak would lead to a "tumultuous few months" for the economy.
Today's move marks a return to all-time lows for rates, with the Bank also announcing extra action to bolster lending by billions of pounds to support households and businesses.
It is the first cut since August 2016 and the first unplanned rates decision since the 2008 financial crisis.
The move has been broadly welcomed by MPs.
Former Chancellor Sajid Javid, who resigned from the role before having the chance to present a Budget, tweeted: “Strongly welcome action by @bankofengland this morning. Absolutely right thing to do to support household and viable businesses during this economic emergency.”
Shadow chancellor John McDonnell also praised the decision but called on the government to provide “firm and sufficient support” for those in self-isolation without access to statutory sick pay.
Health minister Nadine Dorries last night became the first MP to be diagnosed with coronavirus.
The Conservative MP said she has been self-isolating at home after testing positive, and her parliamentary office has closed following advice from Public Health England.
The number of cases in the UK is now approaching 400, with six confirmed deaths.
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